Cheniston Investments Ltd v Waddock and another ; Waddock and another v Cheniston Investments Ltd and another

Rent Act 1977, sections 41, 66 and 67 — Fair rent registration — Effect of improvements and refurbishments carried out by landlords on the fair rent of a flat — Difficult decision by a previous Court of Appeal in Kent v Millmead Properties Ltd considered — That decision accepted as binding on the court but its scope subjected to close analysis — ‘Ratio not easy to discern’ but discerned and reformulated by present court — There were two appeals before the court, one from a decision in an original county court action, the other from a decision in a transferred High Court action The flat in question was the subject of a 1978 fair rent registration of £900 per annum (£75 per calendar month) inclusive of services and the use of furniture — It was then in very poor condition, unmodernised, with only a few bits of furniture — During a vacancy in the tenancy in 1980 the flat was modernised and fully furnished at a cost of about £6,500 — Present tenants moved into the flat in 1983, paying at first a rent of £3,641.28 per annum, raised in 1984 to £3,744 — In 1986 the tenants, having discovered the existence of the 1978 registration, brought proceedings in the High Court for overpaid rent — These proceedings were transferred to the county court and were eventually heard together with the137 landlords’ claim for possession on the ground of failure to pay rent due — The central issue in both sets of proceedings was the status of the 1978 fair rent registration in the light of later events — The county court judge decided in favour of the landlords’ contention that the works of improvement and refurbishment carried out in 1980 had made the 1978 registration no longer applicable The judgments in the Court of Appeal showed that the correctness or otherwise of the county court judge’s decision depended on the ascertainment of the true ratio decidendi in Kent v Millmead Properties Ltd — If it had not been for that decision it would have followed from section 44(1) of the 1977 Act that once a rent had been registered it would continue to be applicable (apart from the possible application of section 67(3)) unless the subject dwelling-house ceased to be the same dwelling-house — Kent v Millmead Properties Ltd, properly understood, decided that the registered rent could also cease to apply if the tenancy ceased to be the same tenancy — Not every material change, such as a change in regard to the provision of furniture, would have this effect — The change must be such as to bring into existence either a different dwelling-house or a different tenancy — This was the ratio of Kent v Millmead Properties Ltd, although there were parts of Ormrod LJ’s judgment which seemed to bear a narrower meaning — The county court judge went wrong in asking whether there had been a material change in the specification of the dwelling-house or in the particulars of the tenancy — He should have asked whether the changes were such as to produce a different dwelling-house or tenancy — The answer to that question must be ‘no’ — It was still the same dwelling-house and the same tenancy — Appeals by tenants allowed The following cases are referred to in this report. De Jean v Fletcher [1959] 1 WLR 341; [1959] 1 All ER 602, [1959] EGD 85, (1959) 193 EG 575 Kent v Millmead Properties Ltd (1982) 44 P&CR 353, [1983] EGD 471; 266 EG 899, [1983] 1 EGLR 109, CA These were appeals by the tenants, David Victor Waddock and Friedehilde Volz, of a flat at 6 Cheniston Gardens, London W8, from decisions of Judge Phelan, at West London County Court, in favour of the landlords, Cheniston Investments Ltd. George M Morris, who was named as a respondent with Cheniston Investments to the appeal, did not appear. Bruce McIntyre (instructed by Arnold Tickner & Co) appeared on behalf of the appellants; Miss Erica Foggin (instructed by Sylvester Amiel) represented the respondent landlords. Giving judgment, SLADE LJ said: This is an appeal in a landlord and tenant dispute by Mr Waddock and Miss Volz (‘the tenants’) from a judgment of His Honour Judge Phelan given at the trial of two actions in the West London County Court on November 27 1987. The premises concerned consist of a flat at 6 Cheniston Gardens, London W8 (‘the flat’). It will be convenient to set out the material facts more or less chronologically. On February 22 1978 a rent for the flat was registered under the Rent Act 1977 (‘the 1977 Act’) on the application of the landlord’s agents. The particulars, as shown in the register, included the following. The flat was described as: 6 Cheniston Gardens, W8. Second floor furnished suite of rooms comprising entrance lobby, bedroom, living room and kitchen with bathroom and separate wc on lower half landing in a converted house. The tenant was named as Miss V Middleton. The landlord was named as Mr R L Morris deceased. The landlord’s agents were named as Farmer Son & Bennett. The liability for general and water rates was said to be that of the landlord. The rental period was described as monthly. The tenancy was shown as having commenced in June 1961 and to be a statutory monthly tenancy. The allocation of liability for repairs was described as follows: Tenant to maintain the interior of the premises, furniture, fixtures, fittings and effects in good and tenantable repair and decorative repair (fair wear and tear and damage by accidental fire only excepted). Landlord responsible for main structure and decorations of the exterior and common parts. The services provided by the landlord were described as ‘cleaning and lighting of common parts’. The rent determined by the rent officer, exclusive of rates, was expressed to be ‘£900 per annum inclusive of services and the use of furniture’. A section in the particulars subheaded ‘Amount due to furniture and/or services not counting for rent allowance purposes’ stated ‘£ negligible’. The registration (which I will call ‘the 1978 registration’), though shown as made on February 22 1978, was said to be effective from December 19 1977. A section in the particulars subheaded ‘Remarks’ stated: ‘The tenancy is on an inclusive basis and the landlord can add the amount of General and Water Rates to the rent legally recoverable.’  Though the particulars described the flat as being furnished, a section in the particulars headed ‘Furniture provided by landlord’ was not completed. A scale plan was attached to the registration showing the approximate dimensions of the flat. In September 1980 Miss Middleton, who had been the statutory tenant of the flat for many years, moved out. Mrs Sitch of the landlord’s managing agents, Farmer Son & Bennett, then arranged for substantial works of improvement to be carried out to the flat during the period September to November 1980. She also arranged for it to be refurbished. The judge heard evidence at the trial from three witnesses called on behalf of the landlords, both as to the nature and extent of these works of improvement and of the refurbishment and also as to the previous condition of the flat. These three witnesses were Mrs Sitch, Mr Pinney (a builder) and Mr Jacobs (an estate agent of Farmer Son & Bennett). He summarised their evidence in his judgment and appears to have accepted it in its entirety. It was to the following effect. Before September 1980 the flat was in very poor order. The kitchen in particular was very primitive. It consisted of little more than a cupboard under the stairs with an old stone sink, a small Belling cooker and a cold water tap. There was no hot water at all in the flat except for an old geyser in the bathroom. The flat needed rewiring and redecorating. All the plumbing needed renewing. Much of the plaster was defective. When Miss Middleton left the flat, the amount of the furniture was extremely limited, consisting of little more than a table, chairs, a chest and one wardrobe. During the course of the work done at the end of 1980 the premises were turned into what Mr Jacobs described as a ‘modern upgraded’ flat. A partition wall between the so-called kitchen was moved. A new sink of a modern character with a working area was established at the other side of the room. A new electric hot-water system was put into the flat. It was completely rewired. Extensive decoration and plumbing work was done. A new lavatory was installed in the bathroom. All the floors were hardboarded for carpets to be laid. The flat was recarpeted. It was also fully furnished at a cost of over £3,100. The cost of the other works totalled over £3,400. Apart from the moving of the one partition wall, it appears that the dimensions of the flat as shown on the registered plan remained the same. On August 31 1983 the appellant tenants moved into the flat. On September 28 1983 a written agreement (‘the 1983 tenancy agreement’) was entered into between Cheniston Investments Ltd (‘Cheniston’), who is the first respondent to this appeal, as landlord, whereby there was a furnished letting of the flat to the tenants for a period running from August 31 1983 until August 29 1984 at a rent of £303.44 per calendar month (£3,641.28 per annum). On December 10 1984 a second tenancy agreement (‘the 1984 tenancy agreement’) was made between the same parties whereby the premises were let to the tenants on a furnished letting from October 31 1984 until October 30 1985 at a rent of £312 per calendar month (£3,744 per annum). It is common ground that, when the term granted by this tenancy agreement expired, the tenants, who continued to reside in the flat, became statutory tenants. It has not been suggested on behalf of the landlord that, except in regard to rent, the parties’ respective obligations under the 1984 tenancy agreement were materially different from those appearing in the register under the 1978 registration. On August 6 1986 Farmer Son & Bennett, describing themselves as agents for Mr G Morris as landlord, made an application for the registration of a new fair rent in respect of the flat. On November 4 1986 a rent of £180 per month, exclusive of rates but ‘inclusive of services as specified above and use of furniture’ was registered effectively as from that date. Meantime, on August 8 1986, the tenants, having discovered the existence of the 1978 registration, issued proceedings against Cheniston and Mr George M Morris in the Queen’s Bench Division. The draftsman of the statement of claim was apparently unaware of the 1984 tenancy agreement. He pleaded138 the 1983 tenancy agreement and alleged that, since August 29 1984, the tenants had continued to reside in the flat as the statutory tenants of Cheniston and/or Mr Morris. The pleading claimed that the tenants had paid to Cheniston and/or to Mr Morris, through the agents, sums by way of rent totalling £10,817.28. It asserted that the rent of £75 per month registered on February 22 1978 had at no time been cancelled or varied and that by virtue of section 44 of the 1977 Act the rent payable in respect of the flat was thereby limited to a sum not greater than £75 a month. In the premises repayment was claimed of sums allegedly overpaid totalling £8,117.28 plus interest. Mr Morris, though named as a respondent to the appeal, has not appeared before this court, where it has been common ground that at the present time Cheniston is the landlord and the tenants are the tenants of the flat. The second action heard by the judge was brought in the West London County Court by Cheniston as landlord, seeking possession of the flat. In its particulars of claim Cheniston referred to the 1984 tenancy agreement and asserted that since October 31 1985 the tenants had become statutory tenants of the flat on the same terms and conditions as those of that agreement. It asserted that since April 30 1986 the tenants had failed to pay the rent of £312 per month and that there was owing £1,701.20. It claimed possession of the premises pursuant to Case 1 of Schedule 15 to the Rent Act 1977. In due course the tenants’ High Court action was transferred to the West London County Court. That action and Cheniston’s action were heard together by Judge Phelan. At the trial it was common ground that section 57 of the 1977 Act limited the tenants’ claim for overpaid rent in the action, if otherwise a good one, to a period of up to two years and that as a matter of arithmetic the claim, if a good one, amounted to a sum of £1,164.21, together with a claim for interest. It was likewise common ground that Cheniston’s claim for rent in the second action, if a good one, amounted to £4,055.30. The tenants’ case in both actions was entirely founded on the 1978 registration, which they said still applied to the flat. Cheniston, on the other hand, submitted that the works of conversion and refurbishment carried out in 1980 rendered the 1978 registration no longer applicable. The judge upheld Cheniston’s submission. He gave judgment in its favour for £4,055.30. He was satisfied that it was reasonable to make an order for possession but not to make an outright order. He made a suspended order for possession of the flat. However, he granted a stay of the order for possession pending appeal. Mr Recorder Mann QC gave the tenants leave to appeal in their action on December 18 1987. I now turn to the most relevant statutory provisions. Section 44(1) of the 1977 Act provides: Where a rent for a dwelling-house is registered under Part IV of this Act, the rent recoverable for any contractual period of a regulated tenancy of the dwelling-house shall be limited to the rent so registered. The tenancy of the tenants in the present case is a regulated tenancy (see section 18). Section 45(1) provides: Except as otherwise provided by this Part of this Act, where the rent payable for any statutory period of a regulated tenancy of a dwelling-house would exceed the rent recoverable for the last contractual period thereof, the amount of the excess shall, notwithstanding anything in any agreement, be irrecoverable from the tenant. The registration of a rent under the 1977 Act operates to determine the maximum rent payable for premises not merely as between the particular parties who were landlord and tenant at the time of registration. It will determine the maximum rent payable by any tenant for the premises until either (a) it is altered by some subsequent determination, or (b) the period for which the registration was made expires, or (c) some other event occurs which causes the registration to cease to have effect. Sections 66(1) and (2) set out the essential features of registration under Part IV of the Act. They provide: (1)  The rent officer for any area shall prepare and keep up to date a register for the purposes of this Part of this Act and shall make the register available for inspection in such place or places and in such manner as may be provided by the scheme made for the area under section 63 of this Act. (2)  The register shall contain, in addition to the rent payable under a regulated tenancy of a dwelling-house — (a)   the prescribed particulars with regard to the tenancy; and (b)   the specification of the dwelling-house. ‘Prescribed’ means prescribed by regulations under section 74 of the 1977 Act (see section 75(1)). We have been told that currently the prescribed particulars are to be found in Schedule 2 to the Rent Act 1977 (Forms etc) Regulations 1980 (SI 1980 no 1697)*, which lists the following items: 1. Address of premises. 2. Names and addresses of landlord and tenant. 3. If granted for a term, date of commencement of the tenancy and length of term. 4. The rental period. 5. Allocation between landlord and tenant of liabilities for repairs. 6. Details of services provided by the landlord or a superior landlord. 7. Details of furniture provided by the landlord or a superior landlord. 8. In the case of a statutory tenancy which has arisen by virtue of Part I of the Landlord and Tenant Act 1954, particulars of the initial repairs. 9. Any other terms of the tenancy taken into consideration in determining the fair rent. *Editor’s note: The amendments made by the Rent Act 1977 (Forms etc) (Amendment) Regulations 1984 (SI 1984 no 1391) did not affect Schedule 2. Section 67(1) provides that an application for the registration of a rent for a dwelling-house may be made to the rent officer by the landlord or the tenant or jointly by both of them under a regulated tenancy. Section 67(3), as amended, provides: Subject to subsection (4) below, where a rent for a dwelling-house has been registered under this Part of this Act, no application by the tenant alone or by the landlord alone for the registration of a different rent for that dwelling-house shall be entertained before the expiry of [2] years from the relevant date (as defined in subsection (5) below) except on the ground that, since that date, there has been such a change in — (a)  the condition of the dwelling-house (including the making of any improvement therein), (b)  the terms of the tenancy, (c)  the quantity, quality or condition of any furniture provided for use under the tenancy (deterioration by fair wear and tear excluded), or (d)  any other circumstances taken into consideration when the rent was registered or confirmed, as to make the registered rent no longer a fair rent. By virtue of section 67(5), the ‘relevant date’ in respect of the 1978 registration was December 19 1977. As Mr McIntyre pointed out on behalf of the tenants, there can be no doubt that at any time after they had improved the flat and refurbished it in 1980 the landlords could, if they had chosen or thought of it, have applied for the registration of a new fair rent with every hope of success. The tenants’ case is that, having failed to make any such application until 1986, Cheniston is for the period now in question precluded by sections 44 and 45 of the 1977 Act from recovering more than the rent registered in 1978. This submission, if it is broken down into its essential component parts, depends on the following propositions: (1)  By virtue of the 1978 registration, a rent of ‘a dwelling-house’ (consisting of the flat) was at all material times ‘registered under Part IV of this Act’ within the meaning of section 44(1) of the 1977 Act. (2)  The rent recoverable for the last contractual period of the regulated tenancy of the flat (October 31 1984 to October 30 1985) was therefore limited to £900 per annum by virtue of section 44(1). (3)  Since the rent payable for the present statutory period of the regulated tenancy exceeds the rent payable for the last contractual period thereof, section 45(1) precludes Cheniston from recovering the excess. If proposition (1) is well founded, propositions (2) and (3) appear inevitably to follow. The tenants’ case on this appeal thus depends on maintaining proposition (1). Cheniston’s case correspondingly depends on refuting it. Guidance as to the legal effect of a change of circumstances on the registration of a fair rent is to be found in the decision of this court in Kent v Millmead Properties Ltd (1982) 44 P&CR 353† , where a registration of a fair rent of a flat had been determined in 1974 as £5 a week. The register showed that the tenancy was a weekly tenancy, the tenant was responsible for the internal repairs and decorations as limited by the Housing Act 1961 and the landlords were responsible for all other repairs. The register showed further that it was an unfurnished tenancy. In May 1977 the flat became vacant and was fully furnished and extensively redecorated and improved by the defendant landlords. It was let in 1978 to the plaintiff tenants at a weekly rent of £28.50. In June 1980 a fair rent of £17.50 a week for the premises and £5 for the furniture was registered. The tenants, having discovered the existence of the 1974 registration of the fair rent of £5 a week, withheld the excess rental and brought proceedings in the county court claiming the excess rent paid by them. The landlords139 counterclaimed for arrears of rent. This court upheld a judgment of the county court in favour of the landlords. Ormrod LJ, with whom Dunn LJ and Sir Sebag Shaw agreed, having referred in the course of his judgment to the decision of this court in De Jean v Fletcher [1959] 1 WLR 341, said (at p 357): The question that we have to decide is whether the effect of furnishing these premises — and it is common ground that they are properly furnished — is such as to displace the rent which had been registered for it in 1974 on the basis of an unfurnished tenancy. One should start from this position that, anybody looking at the rent register in order to discover what the registered rent of these premises was, would see immediately that the registered rent of some £260 per annum was the rent registered in respect of an unfurnished tenancy and so it could not possibly be said that anyone inspecting the register, who was intending to take a furnished tenancy of this flat, could be misled in any way. Going back to the 1977 Act which, as I have said, is the operative Act for our purposes, I think section 44(1) must be read in the light of section 66(2) and that the reference to a ‘rent for a dwelling-house registered under Part IV of this Act’ means the rent for a dwelling-house registered under Part IV of this Act as set out in the register, that is for the premises, and for the type of tenancy described in the register for which the rent was fixed and not otherwise; so that, if there is a material change either in the specification of the dwelling-house, by either adding or subtracting a room or rooms, or a material change in the particulars with regard to the tenancy, then the rent registered in respect of a different tenancy, different in the sense of different in character and incidence, is not the registered rent for the purposes of section 44(1) and so does not operate to enable the tenants in this case to enjoy for the price of £5 a week the tenancy of a furnished flat for which, in 1980, the fair rent was considered to be £22.50. † Editor’s note: Also reported at (1982) 266 EG 899, [1983] 1 EGLR 109. Though we were referred to De Jean v Fletcher (supra), I think it gives us little assistance beyond indicating the view of Lord Evershed MR that the mere fact that money had in that case been spent on redecoration of the premises in question and in improving the furniture did not change the identity of the ‘premises’ for the purpose of section 4 of the Furnished Houses (Rent Control) Act 1946: see [1959] 1 WLR 341 at p 344. The Kent decision is the important decision for our purposes. There has been some discussion before us as to its ratio decidendi. If I have correctly understood it, this is as follows. For the purpose of applying section 44(1) of the 1977 Act in any given case the contents of the register are of crucial importance; ‘a rent for a dwelling-house’ will, subsequently to the date of registration, cease to be treated as ‘registered under Part IV of this Act’ if (A)  the specification of the dwelling-house contained in the register no longer remains an apt description of the dwelling-house in its current state; or (B)  the prescribed particulars with regard to the tenancy contained in the register no longer remain in all material respects applicable to the current tenancy of the dwelling-house. In a case where one or more rooms have been added or subtracted so as to increase or reduce the floor area of the premises, condition (A) will be satisfied because the registered specification of the dwelling-house will no longer remain an apt description of it in its present state. (I do not think it necessary to advert to the case where the number of rooms has been increased or decreased merely by the removal or addition of particular internal walls; that is not the present case.)  In Kent itself, condition (B) was satisfied because, as appeared from the register, the prescribed particulars contained therein which related to an unfurnished tenancy were not applicable to the current furnished tenancy. Apart from the decision in Kent, I would have regarded it as arguable that, in a case such as the present, the form of the particulars appearing on the register was not relevant in determining the question whether the registration of the rent continued to apply to the dwelling-house for the purposes of section 44 and that the only relevant question was whether the dwelling-house in respect of which the rent was registered remained the same dwelling-house. Such a construction of section 44 would perhaps not appear to cause undue hardship to landlords having regard to the rights to apply for the registration of a new rent conferred on them by section 67, which was not expressly referred to by Ormrod LJ in his judgment. The decision in Kent does, perhaps, give rise to certain difficulties. For example, if I have correctly understood its ratio, the change of a tenancy from a furnished tenancy, as appearing in the registered particulars, to an unfurnished tenancy might possibly entitle the landlord to say that the tenant no longer had the protection of section 44 because there had been a ‘material change in the particulars with regard to the tenancy’. However, it has not been submitted to us that the Kent decision was given per incuriam merely because the court did not expressly advert to section 67. If I have correctly extracted the ratio of the decision, we are bound by it. Furthermore, if I may respectfully say so, such ratio so interpreted seems to me to accord more closely with the legislative purpose of the relevant provisions of the 1977 Act than the construction placed upon them by the learned judge. As Ormrod LJ implicitly recognised, it is important that anybody looking at the rent register (such as a prospective tenant), in order to discover the registered rent, should not be misled in any way. Such a person could readily be misled if it were open to a landlord to claim that a previous registration of a rent in respect of a furnished tenancy no longer applied to premises merely because he had subsequently improved them or had increased or improved the quantity or quality of the furniture therein. The tenant, on inspecting the register and comparing the specification and particulars contained in it with what he could see at the premises, would ordinarily have no means of discovering that there had been any change of any kind. As Mr McIntyre submitted, it can scarcely have been the intention of Parliament that it should be open to a landlord, who has not availed himself of the option to apply for the registration of a new fair rent under section 67, to deny the tenant the protection of sections 44 and 45 of the 1977 Act and to claim a rent higher than the registered rent merely because he has improved the premises or equipped them with more furniture. The rent register must, in my view, have been intended to provide a measure of certainty for all parties interested in discovering whether the rent described in the apparently subsisting entry in the register and on the terms there stated would apply to a subsequent tenancy of the premises in question. The learned judge in the present case clearly interpreted the Kent decision in a manner rather different from my own. He described the issue before him as being ‘a straightforward issue . . . whether there had been a material change in the specification or in the particulars’. He said: The plaintiffs’ contention here is that although it is described in 1978 as a furnished property, the reality is that the amount of furniture in the property was extremely limited indeed and that the court should look at the reality of the situation. I think there is force in that contention. Having summarised the evidence on behalf of Cheniston as to the conversion of the flat and the improvements — the tenants themselves gave no evidence — the judge said: The work, as I have also said, cost over £6,500 in 1980. This was a one-bedroomed flat. I simply mention in passing that if one takes that kind of expenditure and takes 10% of it it comes to £650. One is talking of something over £12 a week as interest alone at 10% on that kind of capital sum. The registered rent was £900, £17 a week. I have been referred to section 67 of the Act, and that is the one which provides for a landlord to apply for an increased rent. He is not obliged to do that. The application can be made on the ground that there is a change in the condition of the flat and that would include improvements but improvements are defined in the Act as excluding matters of decoration or repair, and I find it useful to apply my mind to that because I think in a case of this kind the court has to be careful to remember that the landlord has obligations to keep the property in repair and also remember that matters of simple decoration cannot be prayed in aid when the landlord is contending that there has been a material change in the character of the premises. An example would be the case of rewiring; I do not think the landlord is entitled to say ‘I have rewired because it needed doing’ and so the character of the flat has been materially changed in its particulars, nor, I think, could he say it was simply because he does some painting of the flat. It has to be something more substantial than that. The plaintiffs say here that that is the case here. They say that the premises is now quite different in its particulars. They do not contend that there has been a change in specification in the sense that any further room has been added but it is submitted that a wall has been moved, the layout has been changed therefore, there have been substantial works to the kitchen, new plumbing has been involved, there has been quite extensive plastering, work on the floors, carpeting and work on the entrance hall, and that when one looks at the totality of the matter this is a case where one is dealing with an old one-bedroomed flat which had reached, in effect, the end of its life and needed total stripping out and that was done at a relatively high cost, £6,500, for a one-bedroom flat in 1980. That it was extensively furnished the rent officer’s inventory shows; it had before that virtually no furniture, half a dozen pieces in a poor condition that were thrown away. I have not the slightest hesitation in concluding that the plaintiffs have established a case. I am quite satisfied that there was a change of a material nature in the particulars of this premises. I have considerable sympathy with the judge’s approach to the problem and with the able argument which Miss Foggin has presented on behalf of Cheniston in support of his judgment. She has140 summarised her argument by submitting that there was a ‘material change either in the specification of the flat . . . or a material change in the particulars with regard to the tenancy’ in that (i) the character and state of repair of the premises was materially different in 1983 as compared with 1978; (ii) the furniture provided by the landlord in 1983 was different in character from that provided in 1978. I would agree that the judge made findings (i) and (ii) and that there was ample evidence before him to justify such findings. In my judgment, however, these facts alone do not suffice to show that in 1983 and 1984 ‘a rent for the dwelling-house’ (consisting of the flat) was no longer ‘registered under Part IV of this Act’ within the meaning of section 44(1). The specification of the flat contained in the 1978 registration remained on the face of it an entirely apt description of the flat in 1983 and 1984, even in its improved and altered state. The prescribed particulars with regard to the furnished tenancy contained in the register have remained on the face of them in all material respects applicable to the furnished tenancy of the flat current in 1983 and in 1984 during the last contractual period of the regulated tenancy of the flat and since that date. [In this context it has not been argued before us that significance can be attached to the entry in the register ‘£ negligible’, referred to above.] In my judgment, the improvements and refurbishments carried out by the landlords in 1980 (though substantial) did not cause the rent for the flat registered under the 1978 tenancy agreement to cease to be treated as ‘registered under Part IV of this Act’ at the material time, within the meaning of section 44(1) of the 1977 Act. The landlords would, I think, have been well advised to make their second application for a new fair rent at a much earlier date than 1986. For the sake of clarity I should finally add one point. The general effect of my conclusions is that ordinarily the court, when dealing with sections 44 and 45, cannot on the landlord’s invitation go behind a rent registration which on the face of it is entirely apt to apply to the particular tenancy of the particular dwelling-house in question. The position, however, may be very different where on the facts the landlord is able to show that the dwelling-house, though on the face of it covered by the original description in the registered particulars, is in truth a totally different dwelling-house, eg because the former dwelling-house was demolished and a new one erected on the site. On my view of the facts, that is not this case. The flat is still the same flat, even though it now has a proper kitchen and many other additional amenities. For the reasons stated, I would allow this appeal. Whether or not this conclusion accords with the essential merits of this case, sections 44 and 45 of the 1977 Act entitle the tenants to rely on the 1978 registration. I would set aside the order of the learned judge. Subject to further submissions as to the form of the order, I would direct that judgment be entered for the tenants in their action in the sum of £1,164.21 and that the claims by Cheniston in its action be dismissed. I would be prepared to hear submissions on the question of interest. Agreeing, LLOYD LJ said: If the matter were res integra, I would be inclined to hold that, once a rent had been registered under section 44(1) of the 1977 Act, it remained the registered rent for that dwelling-house, subject only to any increase (or decrease) pursuant to an application under section 67(3) of the Act. Accordingly, if a landlord (or tenant) wished to argue that there had ceased to be a registered rent, and therefore nothing to increase (or decrease) under section 67(3), he would have to show that the dwelling-house in question had ceased to exist or had ceased to be the same dwelling-house. But the matter is not res integra. In Kent v Millmead Properties Ltd (1982) 44 P&CR 353, it was held that section 44(1) must be read in the light of section 66(2). Section 66(2) provides that the register shall contain: (i)  the prescribed particulars with regard to the tenancy, and (ii)  the specification of the dwelling-house. I take, first, ‘the prescribed particulars with regard to the tenancy’. These are to be found in the Rent Act 1977 (Forms etc) Regulations 1980. I need not repeat them. As was to be expected, the form for registration follows closely the prescribed particulars as set out in the regulations, including a box for ‘allocation of liability for repairs’, ‘services provided by the landlord’, ‘furniture provided by the landlord’ and ‘other terms of tenancy taken into consideration in determining fair rent’. Now the terms of the tenancy and the quantity, quality and condition of any furniture provided by the landlord are matters which, if there have been changes, can be subject to an application under section 67(3) of the Act. Yet the Court of Appeal in Kent v Millmead Properties Ltd must be taken to have held that the change from an unfurnished to a furnished tenancy took the case outside section 67(3) of the Act (although they did not expressly refer to that section) and entitled the landlord to say that the registered rent no longer applied. Why?  Not, obviously, because the dwelling-house had ceased to exist or had ceased to be the same dwelling-house; but because there had been, as Ormrod LJ said, a material change in the particulars with regard to the tenancy, so that the tenancy was no longer the same tenancy. ‘The rent registered in respect of a different tenancy’, he said, ‘different in the sense of different in character and incidence is not the registered rent for the purposes of section 44(1) . . .’. So the first question is whether, when Ormrod LJ referred to a material change in the particulars of the tenancy, he was thinking only of a change from an unfurnished to a furnished tenancy or whether he had some broader principle in mind. I can see no justification for the former view. The prescribed particulars with regard to the tenancy are not confined to whether the premises are furnished or unfurnished. Ormrod LJ must have had the other ‘prescribed particulars’ in mind, for which provision is made in the form. In other words, he must have had in mind the possibility of other changes in the particulars which would entitle the landlord (or tenant) to say that the registered rent no longer applied. But how much wider does it go?  For a time I was attracted by the argument that by ‘material change in the particulars’ Ormrod LJ must have meant any material change in any of the particulars. I could see no halfway house. If that had been right, we would have been bound to dismiss the appeal. For there was clear evidence on which the judge was entitled to find, both as a matter of fact and on the face of the form, that there had been a material change in the particulars in this case. But on reflection, I am satisfied that this cannot have been what Ormrod LJ meant. It would be far too wide. It would mean that any change in the terms of the tenancy justifying an increase or decrease in the fair rent would entitle the landlord (or tenant) to say that the old registered rent no longer applied. For any such change would clearly be ‘material’. So I look for a meaning which falls between the two extremes considered so far. The clue to what was decided in Kent v Millmead Properties Ltd lies, I think, in the words in which Ormrod LJ states his conclusion, namely that ‘the rent registered in respect of a different tenancy, different in the sense of different in character and incidence, is not the registered rent for the purposes of section 44(1) . . .’. This means that it is not every material change that releases the landlord (or tenant) from the registered rent, but only if it can be said that the material change has resulted in a different tenancy. It is here that, with great respect, I think the judge went wrong. He asked himself whether there had been a material change (or a ‘change of a material nature’) in the particulars. He had every reason for answering that question ‘yes’. If it had been the right question to ask, he gave the right answer, or at any rate an answer with which I should not have felt it right to interfere. But, in my judgment, it was the wrong question. What he should have asked himself was whether the changes in the furniture were such as, in effect, to make the tenancy a different tenancy. Asking myself that question, I feel bound to answer it ‘no’. I turn next to the second of the two matters covered by section 66(2), namely ‘the specification of the dwelling-house’. What is meant by the specification of the dwelling-house and what did Ormrod LJ mean by a material change in the specification?  Once again, there is a clue in the words that follow, namely, ‘by adding or subtracting a room or rooms’. I regard these words as illustrating, rather than defining, what Ormrod LJ had in mind. I would reject Mr McIntyre’s argument that the question is to be answered in every case by reference to the external dimensions of the property. But, on the other hand, as with the particulars with regard to the tenancy, it is not enough that there should have been a material change in specification. The change must be such, whether by the addition or subtraction of rooms, or otherwise, that the dwelling-house is no longer the same dwelling-house. Here again, I respectfully think that the judge went wrong by asking himself the wrong question. I would agree with him that the creation of a new kitchen (for so it was) and the enlargement of the sitting-room were material changes in the specification. But I would venture to disagree if he were intending to find that the effect of those changes was that the dwelling-house was no longer the same dwelling-house. 141 In the end, the ratio of Kent v Millmead Properties Ltd can be summarised quite shortly. Looking at section 44(1) alone, one would be inclined to say that it is only if the dwelling-house has ceased to be the same dwelling-house that the registered rent ceases to apply. But, looking at section 44(1) in the light of section 66(2), there is a further circumstance in which the registered rent will cease to apply, namely, if the tenancy has ceased to be the same tenancy. In neither case is it enough that there has been a material change. In both cases the material change must be such as to bring into existence a different dwelling-house or a different tenancy as the case may be. I have every sympathy with the landlords in the present case, since the tenants have no merits. I have every sympathy with the judge, since the ratio of Kent v Millmead Properties Ltd is not easy to discern. But, for the reasons I have given, I fear that the judge asked himself the wrong question and as a result his decision cannot stand. Whether one looks at the changes in the dwelling-house, or at the changes in the tenancy, or at both together, it was still the same dwelling-house and still the same tenancy. The subject-matter of the letting had not changed. I would therefore allow the appeal. Also agreeing, RALPH GIBSON LJ said: The appeal was not based upon any contention that the decision in this court in Kent v Millmead Properties Ltd (1982) 44 P&CR 353 was wrongly decided per incuriam on the ground that the court did not consider the relationship, for the purposes of construction, of section 67 to section 44. For my part, I have had difficulty in accepting that Parliament intended that any change covered by section 67(3) could be sufficient to cause a registered rent to cease to be applicable for the purposes of section 44(1) if the rent were charged for what is shown to be physically the same dwelling-house. The phrases ‘type of tenancy’ and ‘material change in the particulars’, used by Ormrod LJ in the passage cited by Slade LJ, seemed to me to be of uncertain meaning and difficult of application in this context. Under the provisions of the 1977 Act set out by Slade LJ a landlord of a dwelling-house for which a rent is registered under Part IV of the Act cannot recover more than that rent. A registered rent is set having regard to all the circumstances (other than personal circumstances) and in particular to the age, character, locality and state of repair of the dwelling-house and, if any furniture is provided for use under the tenancy, the quantity, quality and condition of the furniture: section 70(1); but by section 70(2), for the purposes of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwelling-houses in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms. In other words, the scarcity value of the accommodation is excluded. If there is a change within section 67(3) — eg by such works as this landlord carried out, including improvement — the rent will be increased in respect of that change but the scarcity value will still be excluded. Some idea of the amount of that value is indicated by the fact that the contractual rent for this improved flat was £3,744 pa but the rent registered in 1986 in respect of the flat was £180 per month or £2,610 pa. If a change in the ‘type of tenancy’ or a ‘material change in the particulars’ occurs, then, on the basis of Kent v Millmead Properties, the landlord may receive and retain the full contractual rent until the tenant applies for registration of a new fair rent. It seems improbable to me that Parliament intended the provisions of the 1977 Act to work in that way. The example given by Slade LJ of a change from a furnished to an unfurnished tenancy demonstrates the point. Upon the basis, however, that this court is bound by the decision in Kent v Millmead Properties, I agree that the appeal should be allowed for the reasons given by Slade LJ. The appeal was allowed with costs in the Court of Appeal and below. Judgment was given for the appellant tenants in their action for the sum of £1,164.21 with interest as agreed. The claims by the respondents, Cheniston Investments Ltd, were dismissed.